Micron Technology shares rose on Wednesday as investors became more confident before the company’s upcoming earnings report. This optimism is fueled by growing signs that the memory chip shortage will last for a while.
Micron’s shares were up 3.1% in morning trading, and American depositary receipts of South Korean rival SK Hynix climbed even higher. Both memory chip stocks gained despite the overall market trending down.
Few companies are set for the kind of profit jump Micron expects. The company will report its fiscal fourth-quarter earnings on Sept. 30, and analysts predict its adjusted earnings per share will rise sharply from last year. Revenue is expected to grow nearly five times to $50.41 billion.
Micron’s stock dipped in July because of worries about how long AI spending would last, but it has mostly bounced back and is now valued at $1 trillion again. Investors are more confident that memory prices will keep rising, a belief shared by many on Wall Street. UBS said this week it expects average memory chip prices to go up more than 20% in the third quarter compared to the previous one. The bank also now predicts that both DRAM and NAND markets will stay undersupplied through 2027.
DRAM, which serves as short-term memory in computers and AI hardware, brings in about three-quarters of Micron’s revenue. NAND flash memory, mainly used for long-term storage, makes up most of the rest.
